Epoch INSIGHT Issue 13 (2022)

THOMAS MCARDLE was a White House speechwriter for President George W. Bush and writes for IssuesInsights.com.

Thomas McArdle

The Left’s Greenflation Waging war on fossil fuels inflames inflation

hen you pull aside the curtain of its moral pretensions, the green movement of global warming fanatics is just another socialist scheme to replace the free enterprise’s real-world judgment of how to navigate the economic long term with coerced, illegitimately law-enforced faith in government control.

There’s one preeminent tool that players in the economy—meaning all of us—use to transact honestly and productively with one another: price. And today, we face a price crisis.

The global price of oil has skyrocketed because of the massive government spending of one-party rule by Democrats for more than a year now, cowardice on the part of the Federal Reserve, and all of this exacerbated in recent weeks by Russian aggression in Ukraine induced

by President Joe Biden’s weakness in failing to project American power, especially the debacle of the Afghanistan pullout.

But oil equals transportation, and the fact that everything else that is bought and sold—whether consumed, worn, slept or sat on, washed with, worked with, played with, or used as a means of transportation itself—must be delivered from producer to seller to buyer, means no escaping a widely dispersed ripple effect. When the cost of moving people and things rises, ineludibly the price of everything rises.

“There’s nowhere to hide,” Bankrate chief financial analyst Greg McBride told CNBC regarding the 7.9 percent, worst-in-40-years inflation hurting Americans today. “This is hitting everybody.”

Rents are currently rising at nearly 5 percent, the worst in over 30 44 I N S I G H T April 1–7, 2022

years. Meat, appliances, furniture, buying or renting cars, and staying at a hotel were all up by double digits over 12 months toward the close of last year, months before the oil shock from the war on Ukraine.

That 12-month period saw gas go up by over 50 percent.

This extreme political agenda is a war on the freedom to set prices.

The higher gas prices reach, the better, according to the left. Clinton administration economist Jeffrey Frankel wrote last year, “On one hand, the effect of high oil, gas, and coal prices on consumers is good for the environment, because they discourage demand for fossil fuels.”

He added that, on the other hand, high fossil fuel prices also encourage fossil fuel supply—though he noted that the consequent private investment in the sector has proved to be weaker than expected.

In 2019, energy research firm Wood Mackenzie analyzed the objectives of the left’s war on oil. The various high-minded schemes for weaning America off fossil fuels have been estimated to cost $1.7 trillion for the Biden plan seeking zero emissions, $5 trillion for Texas Democratic gubernatorial candidate Beto O’Rourke’s proposal, and $10 trillion for Rep. Alexandria Ocasio-Cortez’s Green New Deal.

This extreme political agenda is a war on the freedom to set prices.

It’s the equivalent of stormtroopers marching into your supermarket and removing from the shelves the offerings they don’t want you to be free to buy, based on ideological criteria. Maybe it’s Bayer aspirin they hate, or Tropicana orange juice.

Those fewer choices will mean higher prices because consumers are captive to a reduction of competitive alternatives.

Buyer and seller freely agreeing upon prices is the only way resources can be allocated efficiently, a task beyond the ability of any central planner. And far from merely being the difference between comfort and hardship, price in the course of history has meant the difference between life and death, on a massive scale.

Remember the famine in Ethiopia, which saw the world force-fed with the moral outrage of our leading rock stars? Was that the world’s rich starving the world’s poor? Far from it.

As Oklahoma State University political science professor Theodore M. Vestal wrote in July 1985 (the month of the Live Aid concert to raise money for relief of the Ethiopian famine), Ethiopia’s government under its military junta “made farmers accept artificially low prices for the main grains: teff, sorghum, barley, millet, wheat, and maize.” Coffee was “so heavily taxed that peasants do not bother to expand its production. These policies destroyed the incentive of millions of peasants to grow surplus food, and productivity has declined notably.”

No doubt voters will hold Democrats responsible for today’s sky-high inflation in the November midterm elections this year. What too few realize, however, is that dramatically higher prices are not the unintentional result of mismanagement and incompetence; they are the expected, desired results of the Democrats’ game plan. And if they get the green revolution they want, the inflation of today will be dwarfed by what’s to come in the years ahead.